A Look At Fundraising Blitzes For Next Years Presidential Elections; State Budget Crisis Could Effect Natural Disater Help; A Debate About The Morality Of Capital Punishment

Aired July 20, 2003 - 15:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY. JACK CAFFERTY, HOST: I'm Jack Cafferty. Welcome to our program. Coming up on today's edition of IN THE MONEY, the high cost of high office. We'll look at fund-raising blitzes ahead of next year's presidential contest and see how the money raising is shaping your choice in the voting booth.

Plus, blown away, with the states strapped for cash, storms like hurricane Claudette can hammer a state's budget. We'll find out whether Washington still has the financial muscle to help carry the load.

And, debating the death penalty: Some call it justice, others call it murder. We'll talk with best-selling author and attorney Scott Turow about capital punishment and about what it costs and some of the numbers are truly surprising.

Joining me today as always, as always, my two friends on the program, CNN correspondent Susan Lisovicz and Andy Serwer, "Fortune" magazine editor at large and colleague with me on "American Morning" every weekday at 7:00 Eastern Time. See how I slipped that little plug in?

ANDY SERWER, "FORTUNE" MAGAZINE: Yeah.

SUSAN LISOVICZ, CNN CORRESPONDENT: A little promo.

SERWER: I like that.

CAFFERTY: $455 billion.

SERWER: Yeah.

CAFFERTY: That's a staggering number. That's the deficit this year, they think.

SERWER: Yeah, the biggest ever by far in dollar terms. And you know, it was just 2000, I think, when we were $200 billion in the black. So, it's almost a $600 billion swing.

CAFFERTY: The democrats keep pointing that out, by the way.

SERWER: Yes. Well, and you know, but it's not all the president's fault. You do have the economy kind of going into a major funk during his administration.

LISOVICZ: But the recession's over. That was the other news of the week.

CAFFERTY: It's true.

LISOVICZ: Election issue: two words, for sure, the economy, we have a rising unemployment rate, we have this deficit. We have something like 40 states in the red. It's a problem.

SERWER: But you know, the deficit thing -- just going back to that for a second, we have the economy, you had 9/11, and then the increased security funding. Then you had the war, and then you had the tax cuts.

CAFFERTY: Right.

LISOVICZ: It all adds up.

SERWER: So, you know, not a surprise here. And the big point, though, you have to remember is the deficit in terms of GDP, in terms of the overall economy not as big as back in the Reagan years. So, while it's a record in dollar terms, not relative to the overall economy.

CAFFERTY: You mentioned the election. I was listening to somebody being interviewed the other night saying that -- you know, they don't expect to see strong job creation in this economy until sometime the middle of next year. George W. Bush better hope it gets here by then because if it doesn't he's liable to wind up a one-term president just like his dad is.

LISOVICZ: Well, he remember...

(CROSSTALK)

CAFFERTY: It was the domestic economy that cost his father the job.

SERWER: I kind of disagree. I think people are so concerned about the war, the war on terror, and all those foreign affairs, that he has a past, Jack, when it comes to the economy.

CAFFERTY: Even if the economy's still in the tank?

SERWER: Yeah. I believe that.

CAFFERTY: You think so?

SERWER: Yeah, I do.

CAFFERTY: Interesting.

LISOVICZ: Well, we'll know in about another year and a half.

SERWER: We'll find out. CAFFERTY: All right. Before that, a successful run for the White House takes equal parts cash and commitment. It might even take more cash than commitment. Reports filed this week with the federal regulators show that President Bush has raised more campaign money than all nine democratic challengers combined. Among the democrats, Vermont governor, Howard Baker -- Howard Dean, not Howard Baker. Howard Dean brought in the most money lately. Massachusetts Senator John Kerry has the biggest war chest going into the primaries. For the big picture on fund-raising we're joined, from Washington now, by congressional correspondent, Jonathan Karl.

Jonathan, nice to have you with us. This is the new primary, isn't it? How much money we can get into the bank before the primaries.

JONATHAN KARL, CNN CORRESPONDENT: This is the first primary and at this stage, by far the most important. And Jack, the recession, or the slumping economy certainly hasn't hurt George W. Bush's fund- raising. As you mentioned, that incredible figure of him actually raising more than all nine democrats combined. And you have to consider that he did that really working just a few days. This was just with a few days of successive fund-raisers. He blows into town, he can raise you know, $5 million in a single night. These guys spend a full quarter and are lucky to raise that amount. It's really staggering.

CAFFERTY: What happened to the idea of campaign finance reform, Jonathan?

KARL: Well, campaign finance reform made it easy to raise more money on this stuff, because it banned that soft money but it allowed Bush to increase the amount he can get from individuals. It used to be $1,000, now it's $2,000. So, thanks in part to campaign finance reform, Bush, who raised $100 million last time, should be able to raise, and they think he can raise $200 million this time. So, he has John McCain to thank for it all.

KARL: (LAUGHING) Yes. But you know, another figure to keep in mind here, is not only how much they're raising, but how much money they have in the bank. This is really the key figure. And I've got some numbers on this. If you look at Bush, he raised about $35 million, but he's got $32.6 million in the bank. That figure is more than the top three democrats combined. The top three democrats in that critical cash on hand number are John Kerry, John Edwards, and Howard Dean. And keep in mind both Kerry and Edwards were able to transfer money in that they had raised in previous years from their senate campaigns. So, Bush is just swamping these guys on every possible indicator.

CAFFERTY: And, at the time when the voters start paying attention to a presidential campaign, that's when the money really starts flowing into television advertising and campaign advertising. If you have a big enough bankroll, you can actually probably overcome some of the shortcomings on maybe some of the issues simply by bombarding the electorate with enough images that you're really a good guy and deserve to be elected to office, can you not?

KARL: Sometimes, but you know -- we've seen the reverse happen. I mean, we've seen isolated races -- statewide races where somebody with the overwhelming money advantage still ended up losing. I mean, we don't have to remember the Huffington campaign out in California. You know, there are times when a lot of money will not overcome the negatives. It depends how big the negatives are.

But, one key factor that a lot of people don't realize about this is that the money that they are raising right now is money for the primaries. This is not general election money. In fact, it cannot be used in the general election. It's money to be used in the primaries. And you may have noticed, but President Bush doesn't seem to have a republican primary opponent. So, he's going to raise $200 million to run against nobody. But, once you finally get into the general election, after the conventions, that is publicly financed. So actually, when you get to that point and the republicans have scheduled their convention way in September of 2004, an unprecedently late convention, but once you get to that point Bush will actually be on equal footing with whoever the democratic nominee is. But, they hope by that time they have hammered and pummeled the guy so much, that he'll have a big advantage at the start.

CAFFERTY: Thanks, Jonathan.

Jonathan Karl reporting from Washington.

If a political campaign runs on big bucks, then even the best qualified candidates can't get to the White House without a fat bankroll, and that raises questions about who ultimately winds up in power in this country and how they get there.

For more on that we're joined now, from Washington by Adam Lioz, democracy advocate with the U.S. Public Interest Research Group. Nice to have you with us, Adam.

ADAM LIOZ, U.S. PIRG: Thanks for having me back.

CAFFERTY: What's wrong, if anything, with the system as it is?

LIOZ: Well, in a nutshell the thing that's wrong is that the amount of money that a candidate raises is not a good indication of his or her public support. And, that's because right now, as Jonathan mentioned, especially because of the new, quote, "campaign finance reform law," which we opposed because we didn't think it amounted to very much reform, but now candidates are raising an overwhelming amount of their money from a tiny segment of wealthy donors. So, as an example, for the first two quarters of this year presidential candidates raised more than three-quarters of their money in contributions of at least $1,000.

Now, I don't know about the viewers of your show, but most Americans certainly can't afford to part with that much money to give to a political candidate. So, it's really out of reach for average Americans. And what that means is that, for example, a Washington lobbyist who can afford to cut a $2,000 check has about 40 times the influence over who has the resources to run as a working class family who can only afford to, let's say, give $50. So, the real problem we have right now is that no matter who emerges victorious on Election Day or primary day, big money donors are certainly winning the day.

LISOVICZ: Right. And we've seen them especially do some magic for President Bush's re-election campaign. On the other hand, Adam, I'm sure you were listening to our congressional correspondent saying that out of the nine democratic candidates three of them are starting to pull away from the pack. How much pressure is on the other six to drop out so that they can more effectively fund-raise?

LIOZ: Right. Well, I think at this point it's a little bit too early to say that these candidates are out of the race. Certainly, a recent poll showed that two thirds of Americans who were polled don't -- can't even name any of the candidates. So, right now we're in an early stage of the campaign. Fund-raising certainly takes primacy in this early stage, but there is time for other candidates. The problem that they're experiencing, though, is that perhaps their efforts to reach out to average Americans will not be rewarded nearly as much as the folks who can go and pick off $2,000 donors. So, while the democrats certainly would like to start consolidating their fund- raising in order to combat President Bush's towering advantage, I think there's still time at this phase for candidates to gain their foothold.

SERWER: Adam, I want to ask you about some of the candidates. You just saw Dick Gephardt up there. Why, number one, has he not been able to get over the hump? I mean, he's a good guy, popular guy, popular with labor. That's number one. And number two, is Howard Dean the next Bill Clinton? I mean, the governor of an obscure state coming from nowhere. What's your take?

LIOZ: Well, as a non-partisan organization I wouldn't want to get involved in picking candidates here and there. But, one thing I can say, though, is that right now we have a system that rewards people who are able to, again, mobilize a very narrow segment of wealthy donors. So, what Howard Dean is doing is exciting in the sense that he is going out and tapping into the internet and tapping into smaller contributors. He's really putting the lie to the notion that you can't run a campaign under lower contribution limits with smaller dollars. And so, I think it's exciting what he's doing. Unfortunately, our system again tends to reward folks who raise money from larger contributors. So, the question is will Dean be able to keep up this pace? Because, let's remember, for every new $2,000 donor that any candidate identifies someone who's going after smaller donors may have to identify 20, 30, 40 new donors to match that $2,000 donor.

CAFFERTY: You mentioned Howard Dean. And, I'm thinking of Jimmy Carter and of Bill Clinton, who at this stage in the campaigns were unknown, had very little money, their organizations were barely even -- you know, in the embryo stage. And, they went on to become president of the United States based on a connection that they made with the voters and a message that resonated with the folks who made the ultimate decision. Doesn't that sort of fly in the face of this argument that big money corrupts the system?

LIOZ: Well, actually, if you look carefully, I mean, in almost every case in our history the candidate who's raised the most money has ended up with the presidential nomination. So, while it might not be true quite this early in the election in the end big money tends to win the day. And so again, the reality is -- is that if you're not able to mobilize a set of donors at some point in your campaign your chances of emerging victorious are very slim.

CAFFERTY: Fair enough. Adam, nice to have you with us. Thank you for joining us. I appreciate it. Adam Lioz, National Association of Public Interest Research Groups joining us from Washington, D.C.

LISOVICZ: Ahead on "IN THE MONEY," batten down the hatches. Hurricane season is here with a special threat for states low on cash. We'll look at whether Washington has the money to pick up the pieces.

Plus, a new take on "old sparky." Author and attorney Scott Turow looks at the death penalty and whether the results are worth the cost.

And Sandy Weill's exit strategy. After years of speculation we'll tell you who's taking over at the head of Citigroup. Find out what the answer means for investors.

(COMMERCIAL BREAK)

CAFFERTY: Hurricane Claudette lost some of its punch by the time it made landfall in East Texas earlier this week. But, there was heavy damage in a lot of places. And this is a hurricane season, the experts say, could be the worst in years. Here's one more wrinkle. The federal disaster relief fund is almost broke. But, many states are looking to cope with natural disasters like hurricanes with the federal money given to them by the Department of Homeland Security.

Joining us now, for a look at that is Alan Cohn, who's an attorney with the Homeland Security practice of Akin, Gump, Strauss, Hauer, and Feld in Washington, D.C.

Alan, nice to have you with us.

ALAN COHN, DISASTER RELIEF EXPERT: Thank you for having me.

CAFFERTY: Now, how is it they can give money from the Department of Homeland Security to people who lost a trailer house because of a hurricane in Texas? That doesn't seem like it's related to the kind of stuff the Department of Homeland Security was created to deal with.

COHN: Well, that's one of the issues is -- and that's been a very big issue on the Hill, is preserving what's been characterized as the non-Homeland Security functions of the Department of Homeland Security. However, in the area of emergency preparedness and response I think what you're looking at is really more of an all hazards situation. It's the same responders using the same functions and the same systems to respond to disasters, whether they're manmade or whether they're natural. LISOVICZ: But Alan, shouldn't there always be a stash for something that is really unexpected like for whether it's weather- related or terrorism-related? Wasn't that why Homeland Security was created in the first place?

COHN: Homeland Security, I think, was created to integrate the various functions of the federal government that are involved in emergency preparedness and response, among other reasons. And one of the entities that was brought into the Department of Homeland Security for that reason was the Federal Emergency Management Agency, which is now the Emergency Preparedness and Response Directory. They have the disaster relief fund. But, as has been noted, it's down to under $200 million, and legislation is waiting in the congress to refill that. But, it looks like it could be a little while before that money reaches FEMA.

SERWER: Well, let me follow up a little on Susan's question, because I kind of agree here. I mean, this is an actuarial situation. It's an insurance -- the insurance companies can tell you the average number you of hurricanes that come in. Why can't the government do that? And I agree with Susan. Why can't the states that live on the Gulf Coast have a million dollars a year put in a fund -- North Dakota doesn't have to do it, obviously. But you know, Louisiana, Texas, Florida have a fund, it gets -- some years you tap into it, some years you don't. I mean, if the insurance industry can do this, why can't the states?

COHN: Well, the problem is that first of all, the system was set up so that the federal government would supplement state funding. But second of all, as you know well, the state budgets are under an enormous amount of pressure and contingency funds are one of the places that governors and legislatures are looking to bridge budget gaps. And for that reason these contingency funds are under a lot of stress. In addition, this year we're seeing an enormous amount of weather and naturally related disasters. You have this higher than expected hurricane season. You have an active wildfire season. You had a lot of snow this winter, tornado season. These contingency funds that the states have built up are going to run out soon. And the states are going to be looking for ways to supplement that money.

LISOVICZ: And you know, Alan, it's interesting because when you have an emergency, like a hurricane or like a brush fire, you need that money and you need it right away. So you can't have all this debate in Congress because businesses are lost, lives are lost, homes are lost. You need that cash, and you need it now.

COHN: That's exactly right. And that's the reason that FEMA set up -- that Congress set up the disaster relief fund at FEMA so that FEMA could push the money out quick. FEMA's disaster responders will be there quickly. The state and local responders, the first responders will be there immediately. And their dedication, everybody knows how dedicated and how professional these people are. But they need the resources behind them to get the job done. And so, the state of the disaster relief fund at this stage causes a lot of concern in the emergency management community. CAFFERTY: What's the answer? I mean, realistically the federal government's not going to tell people along the Gulf Coast of Texas that were bashed around by Claudette -- hey, sorry, I don't have any money, figure it out for yourself.

COHN: Well, realistically what needs to happen is that Congress needs to replenish the disaster relief fund and it needs to do that, not necessarily in a way that's expedient and that fits in with the rest of the budget, but it needs to do exactly what the insurance companies are doing and look at the trends over time and figure out how much money FEMA really needs to respond to these disasters.

The other thing that needs to happen is that states and local governments are getting a lot of money from the Department of Homeland Security right now for terrorism preparedness. Well, from an emergency preparedness and response perspective, as I said before, emergency preparedness and response is really all hazards preparedness and response, and states will maximize the use of that money by preparing on an all-hazards basis to have funds available for first responders, for disaster response, to help people out in the event of a disaster, like I said, whether it's manmade or whether it's a natural disaster.

LISOVICZ: Alan, how closely is the money being monitored? You know, it's great to be prepared, but are the states all organized? In other words, is it just a crazy patchwork of how the money is spent, or is it being spent efficiently in your view?

COHN: Well, right now states are given a lot of flexibility as to how to design a plan that's going to work in their state. And there's a lot of debate on Capitol Hill and elsewhere, if that's the best way to go about things. It seems that the best thing that the federal government can do, the federal government and the Department of Homeland Security is in an excellent position to gather best practices from around the country and to come up with standards for what it means, really, to be prepared at the local level and enforce those standards to make sure that jurisdictions around the country are prepared to a minimum level. Beyond that, to make sure that capabilities are being built on a regional and statewide basis, to make sure there isn't a duplication of resources, that states are using mutual aid and that states understand how to access the federal resources that are available, such as from the Department of Homeland Security, the Department of Defense, the Department of Health and Human Services.

CAFFERTY: All right, Alan. Appreciate your input. Thank you for joining us on IN THE MONEY, today.

COHN: Thank you very much.

CAFFERTY: Alan Cohn, former FEMA employee and attorney now, with the Homeland Security group out of Washington, D.C.

Coming up on this little program we do here, an executive decision, Sandy Weill of Citigroup says he's going to step down as CEO. It's a big announcement. We'll find out if it's a move investors can take to the bank or not.

Plus, capital and punishment. We'll look at what the death penalty costs the taxpayer, as we talk with best-selling author and lawyer Scott Turow about the economics of death.

(COMMERCIAL BREAK)

LISOVICZ: Let's take a look at the top stories from the past week in our "Money Minute." Fed chairman, Alan Greenspan, told Congress he will work to keep interest rates low until the economy recovers. Greenspan added that he's still worried about the huge budget deficit, but praised the Bush tax cuts for adding to household income.

Inflation seems to be holding steady. The latest government reports show consumer prices rose two-tenths of 1 percent in June. But, if you take out food and energy costs, prices actually stayed the same.

And Oracle chief, Larry Ellison, is getting a real salary again, sort of. Ellison has foregone any compensation from his software company since 2000. But, this week the Oracle board announced its giving Ellison 900,000 stock options priced at $12.60 each, There's only one problem, though. Right now Oracle shares are trading below that price. so those options are worthless so far. But, if you weep at all, just keep in mind that Larry Ellison is still a billionaire.

SERWER: That's right, Susan.

Citigroup also dominated the headlines this week. The big news was Sandy Weill announcing he'll step down as CEO by end of the year. Weill will hand over the reins to Charles Prince, who's been running Citi Global Corporate and Investment Banking business for the past year. The banking investment powerhouse also announced its boosting its dividend. Then it agreed to buy Sears and Roebuck's credit card division for about $3 billion. And, during this past year you can see Citicorp shares have been riding a bit of a roller coaster, but they've been on a steady climb since the early spring. All of this makes Citigroup our stock of the week.

So, what do you think, guys? Sandy Weill obviously hugely successful. Will he take the magic with him when he goes?

LISOVICZ: Well, you know, the stock was down sharply on the day it was announced. It was also the day, however, when Citigroup was spending $3 billion to acquire Sears credit card business. But, the fact is he's an icon on Wall Street and there's going to be two guys running the show, a COO and a CEO. And you know, history shows us that those kind of things don't always work well.

CAFFERTY: There are other companies, too, that are just simply -- they're associated with the people who run them. GE was Jack Welsh's company. Citigroup is Sandy Weill's company. When Jack Welch walked into a room to do a deal for General Electric, he got a different reception, I bet you, then Jeffrey Immelt gets. And the guy who replaces Sandy Weill is not going to get the same reception, either.

LISOVICZ: Well, he's a behind-the-scenes kind of guy, he's like the exact opposite of Sandy Weill. But, Sandy Weill's not leaving. He's going to remain chairman of the board till 2006. And, people like him don't want to leave. I mean, think of Sumner Redstone. Is he about 80 right about now?

SERWER: That's right, that's right.

LISOVICZ: And, Sandy's a youngster at about 70.

SERWER: Well, what's interesting, of course, is there have been talks of succession at Citi for a long time -- Sandy, you need to set up somebody to come and take your shoes. So, people I talked to said he's really sort of doing it without doing it. So, he gets the board, investors off his back. He puts two of his guys, Chuck Prince and Bob Willumstad in, right there, and he stays as chairman sort of pulling the strings.

CAFFERTY: Puppet master, sure.

SERWER: That's what a lot of people think.

LISOVICZ: But, you know, it's interesting because as much accolades as Sandy received on the conference call the other day, 30 minutes of verbal bouquets according to our reporter, who couldn't get his question in, on -- about some of the scrutiny that Citigroup has come under recently, but the fact is that Citi is going to have some problems going ahead. I don't think it's a coincidence that Sandy made these changes, now. Two recent surveys showed that Citigroup has the worst board of directors, Fortune 500...

SERWER: It's a juggernaut. He's one of the biggest architects on Wall Street in the history of the Street. It's $100 billion in revenue, a trillion dollars of assets. And you know, it's one of those core American companies. I mean, it is just a goliath.

CAFFERTY: And you look forward once or twice a year to Sandy Weill being in the news to do a big deal, he catches everybody...

SERWER: Yes, that's right. He's a dealmaker.

LISOVICZ: He even did the Carnegie Hall deal.

(CROSSTALK)

CAFFERTY: Yeah, he was -- I mean, he was good for the financial journalism community.

SERWER: (LAUGHING) Right.

CAFFERTY: No, he was good copy as they say.

LISOVICZ: He's not going -- he's not going away.

CAFFERTY: All right. More to come on IN THE MONEY, we are right after this break, we'll be back.

Just ahead, payback on the price tag. Author and attorney Scott Turow looks at capital punishment, whether it's working and how much it costs.

Later, losing money in order to make money. Find out whether you're paying too much for your mutual fund shares. You're watching IN THE MONEY and we shall return.

(COMMERCIAL BREAK)

CAFFERTY: No matter where you stand on the issue of capital punishment, it certainly appears the legal system is not working very well. For example, if you oppose executions, the number of people on death row recently cleared by DNA evidence probably alarms you. And if you support capital punishment, the endless appeals and other costs that states must cover before executing someone is also disturbing.

Joining us now to talk about the flaws in the capital punishment system is form prosecutor and best selling author, Scott Turow. Mr. Turow, nice to have you with us. You have a book coming out in October that deals with this very subject, and I would like to begin with the most startling revelation, I guess, at least to me, which was that it actually costs more to execute someone in this country than it does to leave them on death row for the rest of their lives. That flies in the face of conventional wisdom, I guess, but tell us how that works.

SCOTT TUROW, AUTHOR: Well, it's certainly counter intuitive, Jack. But the reality is that people like me, lawyers, add so much to the costs. And the cost of both incarcerating and maintaining a capital prosecution, which really involves two trials in one, about guilt and one about whether somebody deserves the death penalty, all end up multiplying the costs in a way that at the end of the day -- the state of Indiana, for example, just finished a study, and they figure that a capital prosecution through execution is about 35 percent more expensive than keeping somebody in prison throughout their lives.

SERWER: Scott, let me ask you sort of a philosophical question. That is, what is the point of the death penalty in society? Is it a deterrent? Is it revenge? Was it about economics? What do you think?

TUROW: Well, I don't think economics or deterrents work as arguments in favor of capital punishment. I think at the end of the day, the death penalty is a moral symbol. It's ultimate punishment for ultimate evil. It's meant to be a statement of values by our society that some behavior is so ghastly that there's no other way to respond it than by taking the life of the perpetrator.

LISOVICZ: And in your study, Scott, you found some interesting facts, for instance, that whites are much more likely to get the death penalty than black Americans in your state, in Illinois. TUROW: This certainly wasn't my study. It was done by two eminent researchers, Mike Radelet and Glenn Pierce, who did it on behalf of the commission appointed by our former governor here, George Ryan, and I served on that commission.

But what the study showed were a number of disparities. One, as you mentioned, at least in Illinois, whites were 2.5 times more likely than blacks to be sentenced to death when convicted of first degree murder. On the other hand, the reason for that is that whites kill whites more often because we live in a segregated society. And you are 3.5 times more likely to get the death penalty if you kill somebody who is white than if you kill somebody who is black.

And another thing that factors in there is geographical disparity in the rural areas of this state, which are predominantly white. You are five times more likely to get the death penalty than in the city of Chicago.

CAFFERTY: A fairly recent phenomenon, Scott is the use of DNA evidence to clear people who wrongly have been sentenced to death and are sitting on death row awaiting execution for crimes of which they are innocent. Why couldn't the same DNA technology be used to hasten the demise of the people on death row who are guilty?

TUROW: Well, it has been at times, Jack. There have been cases where defendants having nothing to lose have demanded DNA testing on the eve of execution, and it's proven that they are guilty. So, there's no -- and I'm sure that DNA will, in the future, provide a powerful tool for prosecutors and police far more often than it will for defendants.

But the argument that's being made about DNA testing is simply, let's learn the truth. This is a remarkably accurate technology. It doesn't apply in all cases. It probably doesn't apply in most cases. But where some kind of genetic evidence is available, let's test it, at least if that's what the defendant wants or the prosecution, frankly.

SERWER: Sure. Right. Scott, we were talking before about this ultimate punishment. So what's your take on that? I mean, is there a place in society for this ultimate punishment? Is the death penalty warranted in your view ever?

TUROW: Well, I don't quarrel with the moral concept. I don't quarrel with those people who believe that for ultimate evil, there ought to be ultimate punishment.

But what slowly has occurred to me over the years, and I have had all kinds of positions on capital punishment, is that I don't think we will ever build a system that either decides who has committed an act of ultimate evil flawlessly, or even what ultimate evil is. I think we will always be deviled in these cases by cases of innocence and cases where there are just disparities, where you look at one case, and somebody sentenced to death, and the other case, somebody has gotten life in prison, and it seems the guy who has gotten life in prison committed the graver crime. And if all we are involved in with capital punishment is important moral symbolism, then the justice system has to function with much more precision than I think it's capable of in order to make that moral statement again and again.

CAFFERTY: How much hypocrisy is involved in all of this? And I ask the question in the following context. The Supreme Court ruled -- I think it was in 1986 -- that capital punishment is not cruel and unusual, and the states had the option of reinstituting it. The state of New Jersey reinstituted capital punishment.

Ten or more years ago, I spent about four days down in the New Jersey State Prison in Trenton interviewing guys on death row who had been convicted of the most awful kind of crimes you can imagine. Bottom line is there's never been an execution in New Jersey since this was reinstituted. These guys are still sitting there 20 years later, and a cottage industry has grown up around the hearings and appeals and defense, and all of the stuff that is associated with keeping these things alive year after year after year when anybody with an IQ over that of 85 could figure out they don't deserve to breathe another breath.

TUROW: Well, first, Jack, you have to accept the fact that not everybody agrees with the statement that you just made. More important, I don't think it's realistic to say we are going to have capital punishment. We are going to say ultimate punishment for ultimate evil without also expecting that the system that enforces that horrible sanction is going to demand the highest degree of certainty possible, both to make sure that rights have not been sacrificed and that we are truly executing the guilty.

So, its inherent in the system of capital punishment to have the elaborate appeals that, obviously, perplex everybody.

CAFFERTY: All right. The book coming out in October is called, "Ultimate Punishment, A Lawyer's Reflection on Dealing With the Death Penalty." And Scott if it's anywhere as good as your fiction books, I can't wait to get a hold of one. I enjoy your work very much. Thank you for being with us.

TUROW: You are kind. Thank you, I appreciate it.

CAFFERTY: Now it's time for this week's e-mail question. Should states consider the financial cost when prosecuting death penalty cases? Send your answers or comments on this or any other issue that might be tugging at your sleeve to inthemoney@cnn.com.

LISOVICZ: Still ahead on IN THE MONEY, easy street. Your company can't make your commute any shorter, but it might make the trip a little less stressful. We will tell you how firms are taking some of the worry out of getting to work.

(BEGIN VIDEOTAPE) SERWER: People sometimes ask me, I have got $3,000 to invest in the market, which stock should I buy? The answer could well be, no stock. Putting all $3,000 in a single stock, particularly if it's the only money you have in the market, might be a risky proposition because you will have all your eggs in one basket.

A simple way to diversify is to buy shares in a stock mutual fund. This type of fund invests in a group of stocks, so you indirectly own a basket of stocks, rather than just one. So, if a single stock in your mutual fund blows up, you won't get burned as badly as when you own just that one stock.

You can buy mutual funds directly from companies like Vanguard and Fidelity or from a broker like Merrill Lynch or Charles Schwab. Make sure you understand which stocks the fund invests in and pay close attention to the fees you have to pay.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

LISOVICZ: Before the break, we talked about mutual funds and those fees you need to know about before investing in them. Now more investors are demanding changes to the fee structure, and they are getting some results. E*TRADE says it plans to give investors a 50 percent rebate on some mutual fund fees by the end of the year.

SERWER: One place you can go to learn everything you need to know about mutual funds and the fees they charge is morning star. Christine Benz, senior fund analyst at Morning Star, joins us now for insight. Christine, welcome.

SERWER: What do you look for? Why don't you tick off some things, the most important things investors need to know about funds.

BENZ: Well, you hinted at expenses, and I think that will be a key factor, particularly if we are in for kind of a low-return environment on stocks and bonds over the next few years. So, I would say for stock funds, kind of a basic break point would be 1 percent or less. You typically don't want to be paying more.

And if you are looking at bond funds, you want to set the hurdle even lower. So, I would typically look for bond funds that charge less than .75 percent a year.

LISOVICZ: Christine, there was a disturbing story this week involving Morgan Stanley, yet another problem that investors have to deal with. Massachusetts and New York regulators looking into whether their brokers are really trying to promote their in-house mutual funds. There are just so many mutual funds in the universe these days. How much of a problem is that in your estimate?

BENZ: Well, that particular investigation is still ongoing. But I think it's definitely a consideration. I think investors can do well using a broker, and certainly some of these brokerage houses run decent funds, but any time your broker is putting you in a fund that is the so-called house brand, it's a good question to ask, are you receiving any special compensation for selling me this fund versus some other fund that's not run by your firm? So, I think that's a great question to ask your broker.

LISOVICZ: And is there a track record of comparing these in- house funds to other funds in general.

BENZ: Well, I would say it kind of comes out in the wash. There aren't any great generalizations you can make. Some of these firms run decent funds, and some of their funds are lousy. I think you want to look at whatever track record your broker is thinking about putting you in. Look not just at how it's done in a year like this year, when the market has been rocking, also look back to the bear market and see how a fund did along funds that you -- along side funds that use a similar strategy.

CAFFERTY: You know, for years, Christine, the index funds did probably as well or better than most money managers, and certainly as well as or better than many of the specialized mutual funds. The mutual funds and the money managers charge a whole lot more money. Why shouldn't I just buy something like an S & P 500 index fund and just buy the stock market, take whatever my returns are? My expenses are less than one 1 percent in most cases in the index funds, down around 60, 60 basis points, maybe even a little less than that.

BENZ: You are after my own heart actually. I happen to think that indexing is a great way to go, a great low-fuss, low cost way to go, particularly for the core of your portfolio. You want to make sure you are really keeping a lid on what you are paying in costs. And an easy way to do that is with index fund. There are some active managers who have had a pretty convincing record of beating their benchmarks, but I do really like indexing as a strategy.

CAFFERTY: Christine, we have enjoyed your input here on IN THE MONEY. I appreciate you coming on, I am glad that I asked a question that went right after your heart.

BENZ: Thank you so much.

CAFFERTY: First time I have ever done that.

BENZ: My pleasure.

CAFFERTY: Christine Benz, senior fund analyst at Morning Star. Nice to have you with us.

Just ahead, your daily commute to work may drive you crazy, but it makes some employers nervous. Now, though, there's a new kind of insurance that covers you on the way to the office. That way if you don't get there, your boss makes a couple of dollars.

And here's your chance to tell us what's on your mind. You can e-mail us at inthemoney@cnn.com. (COMMERCIAL BREAK)

CAFFERTY: A lot of Americans face a daily commute that is long, hectic, even dangerous. And then, of course, there's the commute here in New York. But have no fear because out of the goodness of their hearts, the insurance companies are stepping in. They are now selling commuter insurance to a number of major employers so your boss can make a few dollars if you step in front of the crosstown bus on your way into the office in the morning. Ain't that nice? That will make you be careful when you are crossing the street, just to keep the extra change out of his pocket.

SERWER: This whole thing is a racket. I mean, the whole thing's a racket. You said it. The insurance companies -- the boss gets the money. It's a stupid idea. What if you drive to the beach on the way to work? Does that count? You are picking up your kids. The next thing, what people are going to ask for is to have employers pay for their toothpaste. It doesn't make any sense at all.

LISOVICZ: I think it actually makes sense. I mean, given all of these toys that the cars have now -- they have GPS. They have TV. You have your cell phone.

SERWER: That's your boss' fault?

LISOVICZ: I am just saying that people are doing all this -- they are multitasking when they're driving. It's dangerous.

CAFFERTY: And then, of course, then you have those women that put their makeup on while they are driving, huh?

Now take a look inside the e-mail bag. A number of you wrote in. I saw you one morning at 5:00. A number of you wrote in about our segment on the online pornography industry, including one viewer who says the pornographers have a big advantage when it comes to disputed credit card charges, and he's got a point. He writes, "I was defrauded by a porn site that charged my credit card for things I didn't buy." Yes, sure! "Now I can't pursue the matter in court because it would cost me my reputation in the community."

On our segment about declining interests in pro sports, Justin wrote to us about his reasons for tuning out. He says, "Teams no longer have loyalties to their communities. Team owners are constantly demanding new stadiums and luxury box suites for their corporate customers. If they don't get their new parks, they threaten to leave town. It's hard to root for a team that bad mouths your home town." Amen!

You can e-mail us your thoughts about today's program or whatever else may be on your mind. The address is inthemoney@cnn.com.

And that does it for this edition of IN THE MONEY. We thank you for joining us. Thanks to our regular contributors, Susan Lisovicz, of CNN Financial News, Andy Serwer, of "Fortune" magazine. Join us next week at 1:00 Eastern, Saturday, Sunday at 3:00. And if you're so inclined, Andy and I hang out on "AMERICAN MORNING," beginning at 7:00 Eastern time, Monday through Friday. You might check that program out as well.

Thank you for watching. Enjoy the rest of your weekend.

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